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28 December 2016
CAA responded on 20 December 2016 with a blanket trust me response to our first rebuttal and did
not address a single issue. Their response underlines their total lack of concern for their shareholders
in our opinion. Then, late at night on Wednesday, 21 December 2016, they issued a further
clarification on the first point raised in our rebuttal, of course without mentioning our reports or us.
In this second rebuttal, we lay bare more managements continued lies and deception in their
"clarification statements of 20 December 2016 and 21 December 2016.
Before we start with that, we will answer why the stock price has held up in high volumes since it came
off suspension on 19 December 2016.
1
Available at https://www.scribd.com/document/334046847/Conviction-Short-Report-on-HK-0633-China-All-Access-byTriam-Research
2
Available at http://www.hkexnews.hk/listedco/listconews/SEHK/2016/1218/LTN20161218035.pdf
3
Available at https://www.scribd.com/document/334674394/Triam-Research-First-Rebuttal-to-HK-0633-China-All-Access
Triam Research
#1 STOCK PRICE MANIPULATION SINCE 19 DECEMBER 2016
We believe that there has been blatant stock price manipulation and a false market with CAAs stock
after it came off suspension on 19 December 2016. We believe that someone has been manipulating
the stock to 1) induce a short squeeze, 2) keep the price above the exercise price of CAAs outstanding
convertible instruments or 3) possibly save on a margin call of an influential company insider.
We earnestly call for the SFC and the HKEX to investigate this blatant stock price manipulation.
SFC can easily start by looking at opening and closing auction order books, and comparing them
trades with executed by broker 2108 from Freeman Securities Limited (formerly Dynasty
Securities Limited).
The opening auction on 19 December 2016
The day the stock came off suspension, someone put in an order to buy 10 million shares at a 10%
premium to the prior close4. The order was placed into the HKEX trading system well before the
open. The order was put through Freeman Securities Limited (CE Ref: APR560, formerly Dynasty
Securities Limited) using broker code 2108.
As can be seen from the chart below, the size of this single order was gigantic5 at more than 8
times the average daily trading volume of this stock (HK: 0633). The stock has not traded
anywhere close to 10 million shares a day in the previous year.
12.0
10.0
8.0
6.0
4.0
2.0
-
6
-1
6
12
-D
ec
-O
ct
-1
ug
-A
13
-1
6
14
un
-J
15
-A
pr
-1
-1
6
16
16
-F
eb
-1
-1
ec
-D
18
Million Shares
Stock price at the time of trading suspension on 13 December 2016 was HK$ 2.25.
The opening auction order was for 10 million shares. From 1 November 2016 to 13 December 2016, HK: 0633 has traded at an
average volume 1,145,919 shares/day, minimum volume of 946,069 and maximum of 1,287,269.
5
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Triam Research
The order was at 10% premium to the previous closes trading price.
2.60
2.55
2.50
2.45
2.40
2.35
2.30
16-Dec-16
15-Dec-16
14-Dec-16
13-Dec-16
12-Dec-16
11-Dec-16
9-Dec-16
10-Dec-16
8-Dec-16
7-Dec-16
6-Dec-16
5-Dec-16
4-Dec-16
3-Dec-16
2-Dec-16
2.20
1-Dec-16
2.25
Why was the order size so big? Why was the order to be executed at a 10% premium on a stock
that had trended down sharply in the previous session? Why was such a large buy order put in
even before the market opened?
To us, the intention is clear the sole objective of this order was to ensure that the stock price did not
fall when the stock reopened for trading after being suspended due to Triam Researchs report.
In addition, we have also observed Freeman and possibly other agents acting with impunity throughout
this week during opening and closing auctions as well as by placing aggressive bids in size to push
up the price whenever the stock shows weakness.
We earnestly call upon SFC and HKEX to investigate this blatant stock price manipulation.
In addition, we have also highlighted indications of stock price manipulation going back several years
in our report.
Given that we suspect fake and inflated assets to be around RMB 4.5 billion (HK$ 5 billion), this
expense of keeping the stock price high after it came off suspension works out to a paltry 2.7% of the
questionable amount.
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Triam Research
Suspicious Assets
RMB
% of 1H
% of 1H
Thousands 2016 Equity 2016 Assets
1 Suspect Trade Receivables
998,769
31%
16%
2 Property Deposit
180,000
6%
3%
3 Equipment and Raw Materials Prepayment
124,400
4%
2%
4 Non-current Machinery Prepayment
221,013
7%
4%
5 Undisclosed Prepayment
452,934
14%
7%
6 "Potential Equity Investment"
720,628
23%
12%
7 Loans Receivable
1,083,472
34%
18%
8 Structured Deposits
500,000
16%
8%
9 Entrusted Loans
210,000
7%
3%
4,491,216
141%
73%
Source: Triam Research report dated 13 December 2016.
Misappropriation of capital in the billions is exactly what we suspect with CAA, as detailed in
our report. This was only possible because CAA is a listed company with the ability to raise
capital from the public markets which it has repeatedly done, as we have detailed.
Moving on to the rebuttal of CAAs absurd clarification statements, we start with the latest
development.
The Company wishes to state and clarify that, as stated in the 2015 Results
Announcement, the relevant disclosure there relates to the revenue from customers
amounting to 10 percent or more of the Groups revenue, that is, the total revenue
from both the continuing operation and discontinued operation of the Group during
FY2015. On the other hand, the disclosure in the 2015 Financial Statements relates
to revenue from the continuing operation of the Group during FY2015 contributed by
customers amounting to 10% or more of the continuing operation of the Groups
revenue. The bases of disclosure are completely different. As disclosed in the 2015
Results Announcement, during the FY2015, the Group entered into a transaction
Source: CAA Clarification Announcement dated 18 December 2016 in response to Triams report, available at
agreement for disposal of 54% equity interest in (Shenzhen
http://www.hkexnews.hk/listedco/listconews/SEHK/2016/1218/LTN20161218035.pdf.
Xing Fei Technology Co., Ltd.) (Shenzhen Xingfei) (which together with its
operating subsidiaries were principally engaged in the research and development,
In
our rebuttal, weand
pointed
outof
thatmobile
if this were
true, then
is ZTE
not shown
as aproducts).
top customer
manufacturing
sales
phones
and why
mobile
power
source
in the 2015 annual results announcement despite purportedly having RMB 2.9 billion revenue
Following the completion of such disposal in January 2016, Shenzhen Xingfei and its
contribution in 2015, which would be well over the 10% of revenues threshold. CAAs
subsidiaries was
had clearly
ceasedcaught
to be lying.
subsidiaries
Company
andlistaccordingly,
the
management
Refer to of
ourthe
report
for a full
of their fraudulent
operations
of
Shenzhen
Xingfei
and
its
subsidiaries
were
treated
as
discontinued
actions.
operation in the financial statements of the Group for FY2015.
The Allegation Report also questions the reliability of the financial statements
audited by HLB because certain amounts in the consolidated statement of profit or
loss of the Group and certain balances in the consolidated statement of financial
position of the Group were different between the 2015 Financial Statements as
disclosed in the 2015 Results Announcement and that in the 2015 Annual Report.
triamresearch.com
The Company wishes to state and clarify that regarding the consolidated statement of 4
profit and loss of the Group for FY2015 in the 2015 Annual Report, figures for the
top line items such as revenue, cost of sales and gross profit were the same as those
39,934
48,713
39,934
48,713
Impairment of
- property, plant and
equipment
= intangible assets
11,379
6,198
11,379
6,198
25,966
25,966
Triam Research
Provision of
communication
application solutions
and services
2015
2014
RMB000
RMB000
1,240,404
N/A 1
Customer A
Customer B
1
899,426
785,130
The corresponding revenue did not contribute over 10 percent of the total
revenue of the Group.
No other customers contributed 10 percent or more to the Groups revenue for both
years.
15
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Customer A
Customer B
899,426
785,130
The corresponding revenue did not contribute over 10 percent of the total revenue of
the Group.
No other customers contributed 10 percent or more to the Groups revenue for both years.
Source:
CAA Announcement
dated 21 December
2016.
The 2015
Financial Information
as contained
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6
3
Provision of satellite
data communication
application solutions
application solutions
and services
2014
2013
2014
Triam Research
Total
2013
2014
2013
RMB000
RMB000
RMB000 that
RMB000
We believe that this sequence
of events
makeRMB000
it self evident
2015RMB000
financial statements remain
unreliable.
Revenue from customers (Note)
Provision of wireless
communication
699,015
425,211
6,339,425
4,268,426
7,038,440
4,693,637
In earlier
years, like in 2013244,833
and 2014,
this top
customers
table
was 361,167
on the basis of including
Segment operating profit
175,815
184,920
185,352
429,753
related
parties.
Suddenly, when challenged on the 2015 financial statements6, CAA now says
Depreciation
and amortisation
7
that only
without91,429
prior disclosure
, the basis was
for thefor
year 2015, and for no
356apparent
1,042 reason,
91,073 and97,745
98,787
Impairment
of
changed to excluding related parties. Do they really think investors will be fooled by this
- property,
plant and
transparent
lie?
equipment
6,198
6,198
In- intangible
addition assets
to receiving segment information
concerning
segment
operating
profit,
25,966
25,966
management
is assets
provided with
segment473,274
information
concerning
and
Reportable
segment
478,895
7,717,952
5,945,596 revenue,
8,196,847assets
6,418,870
2014 Reportable
Annualsegment
Results:
Customers
Table,
including
related
parties
liabilities
used
by
the Top
segments
in their operations.
liabilities
96,025
39,203
5,465,849
4,014,821
5,561,874
4,054,024
Note:
Provision of
Provision of
Revenue from customers
(including related
parties)data
amounting to 10 percent or
satellite
wireless
more of the Groupscommunication
revenue is set out below.
communication
application
application
Provision of satellite
Provision of wireless
solutions
and
solutions
and
communication
data communication
other
services
services
Total
application solutions
application solutions
2013
2012
2013
2012
2013
2012
and other services
and services
Total
RMB000 RMB000 RMB000 RMB000 RMB000 RMB000
Revenue from
customers (Note)
2014
2013
2014
2013
2014
2013
RMB000
RMB000
RMB000
RMB000
RMB000
RMB000
425,211
356,956 4,268,426
249,970 4,693,637
606,926
Customer A
2,722,885
3,066,980
2,722,885
3,066,980
Customer B
899,426
16,317
899,426
16,317
Segment operating
785,130
241,593
785,130
241,593
profit
175,815
146,732
185,352
83,218
361,167
229,950
Depreciation and
amortisation
for theResults Announcement, page 10.
Source:
2014 Annual
year
1,042
728
97,745
3,272
98,787
4,000
Reportable segment
assets
473,274
324,224 5,945,596 4,459,126 6,418,870 4,783,350
2013
Annual
Results: Top Customers Table, including related parties
Reportable
segment
liabilities
39,203
90,938 4,014,821 2,963,844 4,054,024 3,054,782
Customer C
3,066,980
160,754
3,066,980
160,754
This behavior strongly indicates to us that CAA is trying to cover up their deception (unreliable
9
financial statements) with more and more lies.
CAA can always release their full customer data so investors can recreate these tables again
(including/excluding related parties, including/excluding discontinued operations), but we believe that
6
Also recall that CAA claimed in its 18 December 2016 statement that this table was based on total revenues (continuing
operations revenues plus discontinued operations revenues), so such a change of excluding related parties / from including them
was also unwarranted due to this reclassification.
7
Between 30 March 2016 annual results publication date to 20 December 2016 our first rebuttal date.
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they will not do so. It will easily expose their revenue fabrication that we have highlighted in our
report.
CAA have also shown that their accounts are unreliable with the admission that the RMB 721
million potential equity investment in the cash flow statement in FY 2015 is not a potential
equity investment but is now being claimed as changes to non-controlling interests.
In our original report we highlighted a highly irregular RMB 721 million potential equity investment
cash outflow, which did not show up as a prepayment on the balance sheet. CAA clarified on 18
CHINA2016
ALL ACCESS
LIMITED
78
December
with (HOLDINGS)
a clarification
that completely lacks credibility, in our opinion.
We reproduce the relevant section from our report dated 13 December 2016.
There was a mysterious outflow of RMB 721 million for a potential equity investment in 2015.
The amount is large at 21% of 2015 shareholders equity but there is no disclosure on this amount
For the year ended 31 December 2015
whatsoever.
(Expressed in Renminbi)
Note
2015
RMB000
27
(574,390)
(281,275)
(3,478)
(44,418)
(192,599)
(622,286)
(473,874)
(73,763)
28,589
(8,624)
2,232
(720,628)
60,000
(162,155)
10,766
24,616
(204,000)
(227,432)
(560,000)
2014
RMB000
Operating activities
Cash used in operations
Tax paid:
Hong Kong profits tax paid
PRC income tax paid
Net cash used in operating activities
Investing activities
Payment for the purchase of property, plant and equipment
Proceeds from disposal of property, plant and equipment
Proceeds from disposal of intangible assets
Net cash outflow in respect of the acquisition of subsidiaries
Net cash inflow in respect of the disposal of subsidiaries
Payment for potential equity investment
Investment in structured deposits
Withdrawal of structured deposits
Withdrawal of bank deposits with original maturities
over three months
Addition of bank deposits with original maturities
over three months
Interest received from structure deposits
Proceed from disposal of associates
Investment in an associate
Interest received from bank deposits
Net cash used in investing activities
600,000
(790,000)
16,635
22,000
71,493
(303,000)
8,247
(2,255)
21,581
(1,392,066)
(793,632)
Strangely, when looking at the balance sheet and the corresponding notes, there is no reference at
all to any payment of potential equity investment in 2015. So if its not an equity investment, what
is it?
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Triam Research
22. PREPAYMENTS
Note
2015
RMB000
2014
RMB000
(i)
(ii)
221,013
227,432
557
221,013
227,989
471,023
33,564
213,163
237,459
248,361
504,587
698,983
Non-current
Prepayment for potential equity investment
Prepayment for machinery
(iii)
(128,444)
376,143
698,983
Notes:
(i)
On 29 August 2014, the Group entered into an investment memorandum and a supplemental memorandum
with a nationwide mobile broadband network integrated service provider based in Shenzhen in relation to a
potential equity investment. At 31 December 2014, prepayment for this potential investment equity amounted
to USD37,168,000 (equivalent to approximately RMB227,432,000). On 2 April 2015, the Group entered into a
termination agreement with the nationwide mobile and its designated wholly-owned subsidiary in relation
to the termination of the potential equity investment. The prepayment amount was refunded during the year
ended 31 December 2015.
(ii)
During 2015, the Group entered into an agreement with a third party to purchase manufacturing machines.
At 31 December 2015, prepayment for purchase of manufacturing machines amounted to approximately
RMB221,013,000.
triamresearch.com
CAAthe
is changing
accounting
unaddressed
since April
2016, as wishes
they go along, when we
Group for material
FY2015 as
contained items,
in the 2015
Annual Report.
The Company
challenge
their
authenticity.
to state and clarify that the loan receivables referred to the loan(s) provided by the
Group to companies in the supply stream of the IT and telecommunications
By
what stretch
of imagination
does abeen
cashcarried
flow titled
investment
change to
industries.
As these
activities have
out potential
under veryequity
stringent
risk
acquisition
of non-controlling
interests?
management procedures
and the loans
would only be made to business partners which
What
was potential
about the
the Group
equity can
investments
CAA
highlights?
are reliable
and trustworthy,
generate that
revenue
from
interest earned
Why
wasacceptable
potentialrisk
equity
investment
as aGroup
prepayment
inutilise
2014 but
as movements in nonwith an
profile
which can treated
enable the
to better
its cash
controlling
interests
2015to(as
claimed),
without any
at all?
flow to maximise
its in
return
thenewly
Company
and itsand
shareholders
as explanation
a whole.
The above
again highlights
that CAAs
2015the
financial
statements
are and
remain
The Allegation
Report further
questions
discrepancy
of interest
income
as unreliable.
disclosed in the 2015 Results Announcement and the 2015 Annual Report. The
The above
is just
a snapshot.
There
are other
major
irregularities
with return
CAAsonclarification
on this
Company
wishes
to state and
clarify
that the
Group
aimed at stable
assets
item at
thatminimum
we will be
dissecting
in-depth
in
the
near
future.
risk approach as the structured deposits was placed in a financial
institutions which management believes are of high credit rating.
Essentially, CAA has admitted that its accounts are incorrect and contain errors which we
believe
arerefer
material
investors.response
CAA should
answer
to theforHKEX
and the SFC
on this matter.
Please
to the to
Companys
to allegation
2 above
the discrepancy
of
Theirdisclosures
auditor, between
HLB, should
a Announcement
public statement
on the
reliability
the 2015make
Results
and 2015
Annual
Report. of the 2015 financial
statements as we have been calling on them to do so.
The Allegation Report also casts doubts on the justification of an entrusted loan of
RMB210 million made by the Group to third parties in 2015 and June 2016 with an
#3 CAA
OUT TO
PARTY
interestCONFIRMS
rate of 12% per MORE
annum but CASH
without collateral.
TheRELATED
Company wishes
to state
and clarify that, as mentioned above, these activities have been carried out under very
In our
originalrisk
report,
we highlighted
that aand
RMB
millionloan
building
prepayment
stringent
management
procedures,
such180
entrusted
was only
made to done on 10 August
2015companies
was highlyinquestionable.
the supply stream of IT and telecommunications industries with good
creditworthiness after careful enquiry. The quality and risk profile of the entrusted
In itsloans
clarification
announcement
of 18beDecember
2016,byCAA
confirmedinvolved.
that the building is being
granted by
the Group cannot
judged solely
the collaterals
8
acquired
from Skycomm.
Thebe two
related
parties
as CAA and
hasthe
reluctantly
Consideration
should also
madeare
to the
quality
of the ,borrowers
strategic admitted a few
value of such borrower. As disclosed in the 2015 Annual Report, throughout the
years, the Group has developed a set of guidelines in identifying new opportunities
8
See CAAs reluctant admission of the same in their 18 December 2016 announcement and our 20 December 2016 first rebuttal.
and in structuring an appropriate investment model to manage its risk and generate
optimal returns to supplement its organic growth.
triamresearch.com
10
12
Triam Research
days ago. In this transaction, a large amount of money has changed hands from a public company with
outside shareholders, to a private company both of which are under the influence of CAAs chairman.
This is an undisclosed related party asset transfer. The lack of disclosure makes it another
violation of Hong Kong listing rules. CAA should answer to the HKEX and the SFC on this
matter as well.
CAA also clarified that the building is being acquired to be an R&D facility for its upcoming
(currently non-existent) solar business. We believe that this is another outright lie. The building
prepayment was done on 10 August 2015. The solar patent acquisition agreement was only announced
on 12 May 2016 (with the initial MoU for discussion announced on 29 January 2016). This prepayment
was done a full nine months before its solar patent agreement was even signed!
The Company
wishes
to twisted
state and
clarify that
pursuant
the sale and
purchase
CAA
also offered
another
explanation
for this
being atoprepayment.
They
have said that the
agreement
forRMB
the property
entered
the Group
and SkyComm,
building
costs
200 million.
Theinto
90%between
prepayment
was supposedly
becausethe
theGroup
building is under
9
mortgage.
Well,
that is why
there is in
something
called
a closing date
.
has agreed
to acquire
a building
Hebei from
SkyComm
at a total
consideration of
RMB200 million, RMB180 million of which had been paid as deposit and the balance
CAAs
is not by
even
believable
whenthe
handing
over 6%
1H 2016 equity. No
thereofexplanation
shall be payable
30 remotely
December
2016. Under
agreement,
afterofreceiving
one normally hands over a 90% (uncollateralized) deposit in a real estate transaction. Who
the deposit from the Group, SkyComm shall arrange for the transfer of the ownership
following
this company is surprised the prepayment was to a related party? Lets not forget that
of the
building
by 20aDecember
2016,
arrange for
delivery
of vacant possession
the
deposit
was made
year ago and
theand
transaction
is still
not completed.
of the building to the Group within 15 days after the full payment of the
consideration. To the best of the knowledge of the Directors, given that the building
had been subject to mortgage and had been leased to other tenants, the parties had
agreed on payment of a higher percentage of deposit and a longer completion time so
as to facilitate the discharge of the existing mortgage which is the pre-requisite for
completion of the transfer of ownership to the Group, and to vacate the existing
tenants prior to completion. As disclosed in the 2015 Annual Report, it is the plan of
the Group to use this building for the research and development of the optical
Source:
CAA clarification
dated 18
December Such
2016. acquisition did not constitute a
communication
andannouncement
solar energy
business.
discloseable transaction and/or connected transaction for the purpose of Chapters 14
and 14A of the Listing Rules.
10
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11
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12
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136
PART 2 CAA IS PLAYING WORD GAMES TO WRIGGLE ITSELF OUT OF THIS LIE.
The 2015 annual report clearly states that the RMB 221 million prepayment was for machinery. Their
18 December 2016 clarification statement refers to this prepayment as materials. We think we know
NOTES
FINANCIAL
the
reason TO
it isTHE
to re-label
the outflow STATEMENTS
so that this item can be made to disappear more quickly than
31 December
would
be2015
possible with machinery that lasts for several years.
(Expressed in Renminbi unless otherwise indicated)
22. PREPAYMENTS
Note
2015
RMB000
2014
RMB000
Non-current
such refund was reflected in the interim report of the Company for the six months
Prepayment
potential
equity
investment
Prepayment
material purchases
471,023
237,459
would
not befortreated
as prepayment for potential equity
investment pursuant
to the
Other prepayments
33,564
248,361
Companys accounting treatment. The prepayment for machinery of approximately
RMB221 million for FY2015 was in relation to the504,587
purchase of698,983
materials for
development of the solar business.
Source:
CAA clarification
announcement
18 enquiries
December 2016.
The Allegation
Report
further dated
raises
as to
(128,444)
a prepayment of approximately
376,143
RMB453 million as disclosed in the condensed consolidated
financial698,983
statements of
We have already proven that CAAs operations at the time did not require big-ticket complex
the
Company
for
the
six
months
ended
30
June
2016
as
contained
in
the
Companys
Notes:
machinery,
and the company does not dispute that. It has instead clarified that
the outflow was for
interim
report
for
the
six
months
ended
30
June
2016.
The
Company
wishes
to state
the solar business. It would be easy for auditors to verify big-ticket capital equipment
orders that are
(i)
On 29 August 2014, the Group entered into an investment memorandum and a supplemental memorandum
and clarify
such
prepayment
mainly
represents
the
prepayment
raw
outstanding.
Instead
materials
are
more
fungible;
materials
can be
consumed
quite fast in most
withthat
a nationwide
mobile
broadband
network
integrated
service raw
provider
based
in Shenzhen
infor
relation
to amaterials
potential equity
investment.
31 December
2014, prepayment
for this potential
amounted
businesses.
and equipments
which
are Atused
in ordinary
business
of theinvestment
Group.equity
Some
of such raw
to USD37,168,000 (equivalent to approximately RMB227,432,000). On 2 April 2015, the Group entered into a
materialstermination
and equipments
had
been
used
and
become
inventories
of
the
Group.
agreement with the nationwide mobile and its designated wholly-owned subsidiary in relation
We challenge
management to reveal proof:
to the termination of the potential equity investment. The prepayment amount was refunded during the year
ended 31 December 2015.
The Allegation Report further questions a payment for potential equity investment of
1. Why were prepayments made a year before even signing the patent agreement?
(ii)
During 2015,
the Group entered
into anas
agreement
with a third
purchase manufacturing
machines. of cash
approximately
RMB720
million
disclosed
in party
thetoconsolidated
statement
At 31 December 2015, prepayment for purchase of manufacturing machines amounted to approximately
flows
of
the
Group
as
contained
in
page
78
of
the
2015
Annual
Report
furtherlead time for
2. What RMB221,013,000.
solar module materials have you ordered that takes more thanbut
12no
months
details
were The
given
in the cost
2015input
Annual
Report
for materials
such potential
equity
investment.
delivery?
majority
of solar
module
are silicon
wafer,
glass and junctions
all of which are available with a few weeks lead-time, not anywhere close to a year. Who is the
Thecounterparty?
Company wishes to state and clarify that such payment was related to the
acquisition of non-controlling interests during FY2015 whose amount was also set
3. If these are indeed machinery payments that require such long lead times (and amount in the
out in the consolidated statement of changes in equity of the Group as contained in
order of 4-5 new build capesize ships), then please reveal which capital equipment you have
pageordered
77 of and
the from
2015 whom?
Annual Report. Among the equity investment of approximately
RMB720 million, (i) approximately RMB19,562,000 was related to capital reduction
of Please
Communications
Ltd.*); has(ii)
4.
justify with proof why is this(Lead
equipment
required whenCo.,
the company
stated that its
plans are based
on 100% outsourced
manufacturing
and that currently
it is in process
approximately
RMB54,750,000
was related
to the acquisition
of in aggregate
about of lining up
thirdequity
party production
6.58%
interest in partners.
Changfei Investment; (iii) approximately RMB588,000,000
was related to acquisition of 100% equity interest in ()
(All Access Zhisheng (Shenzhen) Investment Consultancy Co., Ltd.*) and (iv) the
remaining was related to the acquisition of in aggregate about 9.1% equity interest
in Changfei Investment completed during the first half of 2015. Details of the
acquisition of non-controlling interests during FY2015 are set out in note 35 to the
2015 Financial Statements as contained in the 2015 Annual Report and the paragraph
headed Report of the Directors Material acquisitions and disposals of
subsidiaries and associated companies in the 2015 Annual Report. As the
11
triamresearch.com
13
determined with reference to projected inflation published by the International Monetary Fund (the
IMF).
9.6
31 December 2015
(Expressed in Renminbi unless otherwise indicated)
In the course of our valuation, we applied the corporate income tax rate of 25% and value-added
PART
3 CAAS LIESOF
ON
PREPAYMENTS
GET MESSIER. CAA has said previously that its
36. PARTICULARS
SUBSIDIARIES
(Continued)
tax of
17%. plan does not require any capex as it plans to outsource OEM production.
solar
business
9.7
The English translation of the company names for entities established in the PRC is for reference only.
The official names of the companies established in the PRC are in Chinese.
(i)
On 22 December 2014, the Group disposed its 100% subsidiary, All Access Zhisheng (Shenzhen)
Investment Consulting Limited (All Access Zhisheng), to a third party at RMB1.00 as
Basedconsideration.
on the business
planthis
fordisposal,
the Patent
Licenses,
which to
involves
OEMs
producing
the Li-LA
Following
the Group
also ceases
hold 3.3243%
interest
of equity
Lens Arrayinand
PV module,
the as
contributory
assets toholds
the incomes
the Patent
Licenses
would only
Changfei
Investment
All Access Zhisheng
a total of of
3.3243%
interest
in Changfei
Investment.
As the
disposal completed
on 22 December
2014,
was very close to 31 December
include working
capital
balances
since manufacturing
will
bewhich
outsourced.
2014, the income, expenses and profits from the disposal date to the end of reporting period were
considered immaterial. The NCI percentage for assets and liabilities allocated to NCI is 49% and
The after-tax
contributory
working
asInvestment,
at the Valuation
Date,
Source: Announcement
dated
27toJune
pagecharge
37. Asfor
profit allocated
NCI2016,
isasset
45.6757%.
the the
Group
retains capital
control is
on 3.26%
Changfei
this
disposal
as an equity
and effect
changes by
of non-controlling
which is based
on was
the treated
benchmark
short transaction
term borrowing
ratein quoted
the Peoples interests
Bank of China.
Now in its amounted
clarification
statement, RMB38,505,000.
CAA says it is
a 2015,
largeGuangdong
building for
solar entered
R&D purposes.
to approximately
Onbuying
9 October
All Access
Does a RMB
180
R&Dagreement
spend look
noYuefeng,
capex?pursuant
No. to which Guangdong All Access
into
themillion
equity transfer
withlike
Beijing
has conditionally agreed to acquire 100% equity interest in Zhisheng from the Vendor for a total
of RMB1.again
Zhisheng
an investment
holding
company
in holding
If tomorrowconsideration
they turn around
andissay
that
RMB
221principally
million engaged
prepayment
was actually
the
37 other
about 33.32%
equity
interest
in Changfei
Investment.
for equipment,
then the
solar
capex
would go
up to RMB 401 million (so far).
(ii)
On 24 July 2014, the Group disposed 54% equity interest in a subsidiary, Changsha Yuan Ben Xin Xi
Against this figure of RMB 180 401 million, in its 2014 annual report it said its capex commitments
Technology Company Limited. The net proceeds of the disposal is RMB10,000,000. Gain on disposal
for all its businesses
for the next 12 months was only RMB 44 million. Now it is clarifying that
before tax of RMB1,862,117 have been recognised in the consolidated statement of profit or loss for
capex incurred
for
solar
is somewhere between 2.4x-5x of its estimate for 2016 of RMB 75 million.
2015
37. COMMITMENTS
(a)
Capital commitments outstanding at 31 December 2015 not provided for in the financial statements
were as follows:
Contracted for
2015
RMB000
2014
RMB000
75,253
43,978
(b)
At 31 December, the total future minimum lease payments under non-cancellable operating leases
were as
follows:
Source: 2015 annual
report,
page 169. The committed figure is the same in the 2014 annual report.
2015
2014
38,725
1,048
25,349
5,472
67,242
52,522
The Group is the lessee in respect of a number of properties. The leases typically run for an
initial period of one to eight years, with an option to renew the leases when all the terms are
renegotiated. Leasing arrangements with related parties are set out in Note 39(a). None of the
leases include contingent rentals.
triamresearch.com
14
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